UK inflation unexpectedly ticks higher in December
By Abigail Townsend
Date: Wednesday 21 Jan 2026
(Sharecast News) - Inflation rose by more than expected in December, official data showed on Wednesday, after a jump in tobacco prices and airfares.
According to the Office for National Statistics, the consumer price index rose by 3.4%, up from 3.2% in the 12 months to November. Consensus had been for a more modest rise, to 3.3%.
Alcohol and tobacco prices jumped by 5.2%, up from 4.0% a month previously, following a recently-introduced increase in excise duty. That rise usually comes through in November, but this year fell in December following the later-than-usual Budget.
Airfares, meanwhile, were affected by the timing of return flights over Christmas and New Year.
Rising food costs, particularly for bread and cereals, were also an upward driver, however, up 4.5%. Prices had risen by 4.2% in November.
Including housing costs, the CPIH rose by 3.6% in the 12 months to December, up from 3.5% in November.
The December print is the first rise in CPI for five months.
However, Michael Saunders, senior advisor at Oxford Economics, told the BBC: "The rise in inflation is not the start of an upward trend, it reflects a variety of fairly temporarily, quite erratic factors.
"But we do have an issue that inflation is relatively sticky, and the underlying trends are well above the 2% inflation target."
The Bank of England maintained a cautious approach to cutting interest rates last year, despite sluggish economic growth, in response to consistently above-target inflation. Its next decision on the cost of borrowing is due in February and analysts widely expect rates to be left on hold at 3.75%.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN